Price Hikes Inevitable From June Due To Rising Input Costs: Godrej Appliances
Rising input costs due to a strengthening of the dollar and increase in oil prices will make price hikes of consumer durable products inevitable from June, Godrej Appliances said.
“With the rise in U.S. dollar and oil prices, inputs costs for the companies has gone up.. price hike (of consumer durables) is inevitable,” Godrej Appliances Business Head and Executive Vice President Kamal Nandi told PTI.
When asked about the quantum of the hike by Godrej Appliances, he said: “We are observing the price movements. The quantum of price hike will depend on how the U.S. dollar and oil prices move. U.S. dollar at over Rs 66 against rupee is already high. The price hike will happen after June when we have to order for new inventory.”
Nandi said the percentage of imported components in a finished product could range from 10-15 percent to as high as 50-60 percent.
Godrej Appliances, the consumer durables division of the Godrej Group, is eyeing 25 percent increase in revenue at Rs 5,000 crore in the current financial year. The company’s revenue in the financial year 2017-18 stood at over Rs 3,900 crore.
Nandi said the consumer durables industry made representations to the Finance Ministry for slashing the GST on products from 28 percent to 18 percent.
“If the government brings down GST on consumer durables, it will help the industry register good growth in this financial year. It also helps offset higher input costs due to US dollar and oil prices,” he added.
The company is also looking at expanding its distribution network this year by adding more exclusive brand outlets and some outlets through which it sells its products.
“We open EBOs in tier II to tier IV and not in metros. We have 80 EBOs at present, and in this financial year, we will add another 20 to take it to 100. We also plan to expand our distribution channel and add 7,000-8,000 outlets this year,” said.
At present, Godrej Appliances sells its products through 22,000 outlets across the country.